WHAT YOU NEED TO KNOW:
- China announced on Friday its plans for reciprocal tariffs after President Donald Trump decides to put tariffs on steel and aluminum.
- The Chinese Commerce ministry proposed a list of 128 U.S. products including pork, wine, fruit and steel where tariffs could be imposed on.
- China said it will impose tariffs against the listed U.S. goods and might seek legal action under World Trade Organization rules if it cannot reach an agreement with Washington.
China, the world’s second-largest economy next to the U.S., warned that it might impose tariffs on $3 billion worth of U.S. products as a response to President Trump’s controversial trade tariffs.
According to a statement released by the commerce ministry on its website, the 128 U.S. products listed include fresh and dried fruits, wine, nuts, steel pipes, and ginseng and modified ethanol. Those items could face a 15 percent duty while U.S. pork and recycled aluminum goods could see a 25 percent tariff.
The move could be seen as Chinese President Xi Jinping’s possible retaliation where the largest area flagged are U.S. agricultural products, specifically soybeans.
Beijing is open for negotiation but if an agreement is not met, it will surely take measures against the listed U.S. goods.
“China does not want to fight a trade war, but it is absolutely not afraid of a trade war,” the statement said.
Asian stock markets plummet after the news broke, seeing a 4 percent slide in Japan’s Nikkei index.
Economist Tony Nash, CEO and founder of data analytics company Complete Intelligence said that China’s move to target $3 billion in U.S. imports is significant, “but it’s not a lot in terms of the total U.S.-China relationship.”
Nash said that China’s imported goods from the U.S. are expected to reach $172 billion this year.
According to the Chinese commerce ministry, the latest U.S. trade measures harshly damage the multilateral trading system and impact the international trading order. The World trade urge Washington to settle an agreement with Beijing to prevent scarring the bilateral relationship.
On Thursday, Trump has signed an executive memorandum that will impose tariffs on Chinese imports of up to $60 billion. The president remarked that the action was the first of many trade measures the U.S. will make. This will mainly hit particular goods in the technology sector where Beijing holds an advantage over Washington.
Earlier this month Trump had an executive order imposing broad tariffs on foreign aluminum and steel imports. Experts believe that the measure could precipitate a global trade war.
Source: CNBC News